“I noticed that I’m confused about this argument because it implies that the worse earning to give is, the more people should do it.”
**
Some hopefully more intuitive analogies:
When automation dramatically ups the productivity of a single worker in a job, a common result is that fewer people are needed to do the job (people get laid off, sometimes they strike, etc.)
The huge increase in productivity of farmers means that whereas at one point probably 80%+ of the working population was needed in agriculture to produce enough food, now it’s <10%.
If I’m earning barely enough to live on and then living costs outpace wage rises (i.e. my real wage falls), I will probably work more hours.
If I’m cooking, I will likely add much less of an ingredient with a very strong flavour than one with a relatively weak flavour.
**
Peter is looking at a deliberately simplified analysis where all people are either money-producers or money-consumers. If there are too many producers or consumers, the marginal producer/consumer isn’t actually increasing the amount of money that gets moved (we are either opportunity-constrained or funding-constrained). We want a rough balance, and so the worse the producers are at producing, the more of them we need, and vice-versa.
Thanks, I agree that this is helpful and explains his 2nd example where he is comparing the salary of an AMF person to what an E2G person donates, but I still don’t understand the example I quoted where he is comparing the “donation opportunity” from AMF staff versus E2G.
(To use the terms of your last paragraph, it doesn’t seem like this is comparing producers and consumers but rather 2 different types of producers.)
“I noticed that I’m confused about this argument because it implies that the worse earning to give is, the more people should do it.”
**
Some hopefully more intuitive analogies:
When automation dramatically ups the productivity of a single worker in a job, a common result is that fewer people are needed to do the job (people get laid off, sometimes they strike, etc.)
The huge increase in productivity of farmers means that whereas at one point probably 80%+ of the working population was needed in agriculture to produce enough food, now it’s <10%.
If I’m earning barely enough to live on and then living costs outpace wage rises (i.e. my real wage falls), I will probably work more hours.
If I’m cooking, I will likely add much less of an ingredient with a very strong flavour than one with a relatively weak flavour.
**
Peter is looking at a deliberately simplified analysis where all people are either money-producers or money-consumers. If there are too many producers or consumers, the marginal producer/consumer isn’t actually increasing the amount of money that gets moved (we are either opportunity-constrained or funding-constrained). We want a rough balance, and so the worse the producers are at producing, the more of them we need, and vice-versa.
Thanks, I agree that this is helpful and explains his 2nd example where he is comparing the salary of an AMF person to what an E2G person donates, but I still don’t understand the example I quoted where he is comparing the “donation opportunity” from AMF staff versus E2G.
(To use the terms of your last paragraph, it doesn’t seem like this is comparing producers and consumers but rather 2 different types of producers.)